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Why Are Most Schools Facing Huge Budget Crises?

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limitgov Posted: Tue, Feb 1 2011 8:46 AM

I understand government wastes money and goes over budget.  But why specifically?

Was there some bill that cut federal spending on schools or something?

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No, we are spending four times as much per child as 50 years ago. The money is being eaten up by corruption and unnecessary layers of bureaucracy. It's other peoples money, so school administrators are giving each others extravagant pay and cushy pensions. You ask where the money goes. Somebody gets that money. And less and less of it reaches the classroom. State schooling is a racket. Every time there's a debate about educational spending they threaten with cutting spending in the classroom. The teachers unions put out commercials like "the greedy Republicans want to cut spending so children won't have any books". Then they get more money and use it on more corrupt bureaucracy and overpaying bad teachers.

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BioTube replied on Tue, Feb 1 2011 9:50 AM

There's also a lot more being spent on transporting kids to and from school; the rising price of gas is doing its part.

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I can speak on the problems of my school district (Waseca, MN) which I don't think are that much different than most other districts:

  1. Special Education mandates - the cost of providing special education exceeds funding by about $750k/year (total district budget = $22Mill). Cutting programming to match funding is difficult because of Maintenance of Effort requirements - if you supplied x hours of assistance to a child last year, you must provide that same level this year. The requirements of Special Education, the politics of classification and good intentions gone wrong are all easy "fails" but the simple fact that Fed and State govt's make requirements and then do not pay for them causes financial hardship for schools.
  2. Flat funding, funding shifts from states. Per pupil funding has been flat for the last couple of years and then the state has, without advance warning, delayed payments to districts causing them to borrow funds to cash flow operations. Districts with comfortable fund balances are having payments withheld until the state is not facing a budget crisis (Minnesota deficit $6Bill). It is likely that there will be a decrease in funding for all schools in Minnesota this year to offset the deficit.
  3. Failure of local levy - Our district had a levy of $650 per student added to the property taxes but that expired, the district has tried the last 3 years to get voter support of a new levy and has been unsuccessful.
  4. Expiration of one-time funding - Federal or non-profit grants that made added programming or additional staff has gone away.

These are the new headwinds that are causing a great deal of the difficulty which are added on to the idea that govt supplied education is a bad idea, groupthink and power entrenchment in the education industry, union contracts and the unholy phrase "we are doing this for the children" which inspires people to put their pen to the checkbook.

So our district has basically cut the elective courses down to the bone and have added extra study halls and lengthened classes in order to warehouse kids (state requires the amount of time a student must be in the building).

But hey, we have great standarized test scores and we all know how far your standarized test scores get you in life.

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limitgov replied on Tue, Feb 1 2011 10:01 AM

I understand government schools are horrible and need to be replaced with nothing.  I'm not debating that.

specifically, is there a bill or a repeal of a bill that was passed to cause this?

one of the school districts next to me (here in Texas) is short 40 million next year....many others are close to that.

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limitgov:
I understand government schools are horrible and need to be replaced with nothing.  I'm not debating that.

specifically, is there a bill or a repeal of a bill that was passed to cause this?

one of the school districts next to me (here in Texas) is short 40 million next year....many others are close to that.

No, I don't think there was a particular bill that cut spending or anything. It's more that the budget for a school district is an arbitrary number, and they just spend more that that for various reasons.

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Autolykos replied on Tue, Feb 1 2011 11:07 AM

Welcome to the Mises Community, govtmule!

govtmule:
I can speak on the problems of my school district (Waseca, MN) which I don't think are that much different than most other districts:

  1. Special Education mandates - the cost of providing special education exceeds funding by about $750k/year (total district budget = $22Mill). Cutting programming to match funding is difficult because of Maintenance of Effort requirements - if you supplied x hours of assistance to a child last year, you must provide that same level this year. The requirements of Special Education, the politics of classification and good intentions gone wrong are all easy "fails" but the simple fact that Fed and State govt's make requirements and then do not pay for them causes financial hardship for schools.
  2. Flat funding, funding shifts from states. Per pupil funding has been flat for the last couple of years and then the state has, without advance warning, delayed payments to districts causing them to borrow funds to cash flow operations. Districts with comfortable fund balances are having payments withheld until the state is not facing a budget crisis (Minnesota deficit $6Bill). It is likely that there will be a decrease in funding for all schools in Minnesota this year to offset the deficit.
  3. Failure of local levy - Our district had a levy of $650 per student added to the property taxes but that expired, the district has tried the last 3 years to get voter support of a new levy and has been unsuccessful.
  4. Expiration of one-time funding - Federal or non-profit grants that made added programming or additional staff has gone away.

My replies are numbered below:

  1. Are you arguing for the feds and/or the states to spend more here? What are the consequences of not following the Maintenance of Effort requirements?
  2. I imagine the state is doing this to garner public support for tax increases. "We have to raises taxes! They're cutting funds to our schools!"
  3. What do you find wrong with people wanting to keep more of their own money?
  4. Are you arguing for this funding to be ratcheted up permanently?

govtmule:
These are the new headwinds that are causing a great deal of the difficulty which are added on to the idea that govt supplied education is a bad idea, groupthink and power entrenchment in the education industry, union contracts and the unholy phrase "we are doing this for the children" which inspires people to put their pen to the checkbook.

I'm not quite sure what your stances are on the things you listed. Can you please explain?

govtmule:
So our district has basically cut the elective courses down to the bone and have added extra study halls and lengthened classes in order to warehouse kids (state requires the amount of time a student must be in the building).

What are the consequences of violating that requirement?

govtmule:
But hey, we have great standarized test scores and we all know how far your standarized test scores get you in life.

I thought the whole point of emphasizing test scores, from a school-district point of view, was to get more state and/or federal money.

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IMHO, it is because states aren't generating tax "revenue" like they did during the "boom" years.  No "revenue", no funding for schools.

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govtmule replied on Tue, Feb 1 2011 12:33 PM

Good to be here Autolykos,

1. No I am not arguing for more to be spent, just pointing out the structural challenge that is faced by schools as compared to a "normal" organization. As the budgets are tightened, due to other factors, special education is a cost that cannot be cut in the same manner as other costs. Maintenance of Effort is written into the ESEA, so not maintaining leads to funding being withheld. What level of funding gets withheld or how long would it take to recover from the decrease in funding by not performing that effort in the future is beyond my knowledge. I suspect that taking the hit in funding in year x and saving those costs for years x+1 to x+10 would be in the districts best interest but school boards rarely wish to engage in that fight.

2. Agreed.

3. I don't find anything wrong with it - I just offered this as an explanation as to why some districts are going through harder financial times than normal.

4. No, same answer as 3.

The listing of other factors is a sample of the legacy factors that make public education unsustainable, the leviathan would collapse under its own weight eventually but given the exacerbation of items 1-4 the struggle or at least the rate of decay is intensified for more schools now.

Consequences of violating amount of minutes in school again is withholding funding. While I believe the answer is simple disobedience - our school shall not bow to silly mandates for the sake of stolen dollars - the electorate at large and even more so little Timmy and little Sally's parents are of the expectation that their income taxes have already paid for their childs education therefore forgoeing state and federal dollars is not an option. So, kids get warehoused and Timmy and Sally receive what their parents have asked for.

Higher test scores do not equal greater funding, they equal avaoidance of additional mandates that cost money and degrade learning. But as NCLB goes on it raises standards beyond even the mean of a rural middle class white community. So while Waseca may not be the target of the legislation it will eventually be a casualty.

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govtmule:
Good to be here Autolykos,

1. No I am not arguing for more to be spent, just pointing out the structural challenge that is faced by schools as compared to a "normal" organization. As the budgets are tightened, due to other factors, special education is a cost that cannot be cut in the same manner as other costs. Maintenance of Effort is written into the ESEA, so not maintaining leads to funding being withheld. What level of funding gets withheld or how long would it take to recover from the decrease in funding by not performing that effort in the future is beyond my knowledge. I suspect that taking the hit in funding in year x and saving those costs for years x+1 to x+10 would be in the districts best interest but school boards rarely wish to engage in that fight.

Thanks for clarifying. I see that ESEA is a piece of "Great Society" legislation. Why am I not surprised?

Anyways, I of course would recommend breaking the Maintenance of Effort requirement as a matter of principle. But that's just me.

govtmule:
2. Agreed.

3. I don't find anything wrong with it - I just offered this as an explanation as to why some districts are going through harder financial times than normal.

4. No, same answer as 3.

Thanks again for clarifying. I hope I didn't sound too hostile - I just wasn't sure which angle you were coming from.

govtmule:
The listing of other factors is a sample of the legacy factors that make public education unsustainable, the leviathan would collapse under its own weight eventually but given the exacerbation of items 1-4 the struggle or at least the rate of decay is intensified for more schools now.

Good point, although most people still see public education schooling as a good (if not great) idea.

govtmule:
Consequences of violating amount of minutes in school again is withholding funding. While I believe the answer is simple disobedience - our school shall not bow to silly mandates for the sake of stolen dollars - the electorate at large and even more so little Timmy and little Sally's parents are of the expectation that their income taxes have already paid for their childs education therefore forgoeing state and federal dollars is not an option. So, kids get warehoused and Timmy and Sally receive what their parents have asked for.

I suppose that, if a school-board member decided to go against these mandates, they probably wouldn't be re-elected? Has any school-board member actually tried it though?

My understanding is that local governments are ultimately beholden to state governments for public schooling. So if a local government is no longer able to "effectively provide public schooling for all resident children", would the state be able (legally) to take over the local schools? What about filing charges against the local school board and/or administrators?

On the other hand, I can't imagine most parents simply wanting their children warehoused for seven-plus hours, five days a week.

govtmule:
Higher test scores do not equal greater funding, they equal avaoidance of additional mandates that cost money and degrade learning. But as NCLB goes on it raises standards beyond even the mean of a rural middle class white community. So while Waseca may not be the target of the legislation it will eventually be a casualty.

My understanding, which may be flawed, is that the amount of state/federal grant money given to schools is (partially) dependent on the schools' standardized-test scores. That might be a separate issue from what you're talking about, which seems to apply to "under-performing" schools.

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A school board member can try to buck mandates but it takes at least 4 to pass the vote. I am a school board member and am trying to the best I can. The simple truth is that it is not the threat of loss of funding that is the largest impediment it is the fear of being detached from the state. What to do one we are out of the protective womb, so to speak. Knowing that a classical education is offered by "untrained parents" and was offered for centuries before full fledged "school reform" is not enough for people to take the leap. The fact that Catholic Church in town has offered tuition free education for 125 years (they have gone down from k-12 to k-4) is not enough either.

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